on the trading session. it's the leader in terms of percentage moves. ty? >> sue, the markets hit the banana peel there as the rhetoric turned a little bit more bellicose but right now they've come back pretty nicely. maybe they are hopeful there will be a deal. that will do it for today's edition of "power lunch." we'll see you tomorrow. have a great afternoon. "street signs" begins right now. no substantive progress has been made in the talks between the white house and the house over the last two weeks. the white house has to get serious. >> republicans know where we stand. we've said it, we've said it so many times. we're still waiting for a serious offer from the republicans. >> i think all of us today are confident we can reach a bipartisan agreement by christmastime. welcome to "street signs," everybody. i'm not monty hall but let's make a deal because we need one on the fiscal cliff.

both parties pointing fingers at the other guys. the markets are turning on every comment and every real talking head. let's take a look at what's happening out there in the markets. bob pisani is covering today's wild swings. eamon javers is on the political back-and-forth. bob, start with you. as we saw the market got boehner, then got schumered to the up side as well. what do you think the market wants to hear from these guys? >> two things. very simple. they want a deal within the next -- end of month of december and it has to be substantive. there's two parts . a deal soon and it has to be substantive. boehner came out 11:30 eastern time said no substantive progress is made. that's what happens to the smasht. then the democrats started talking, senator schumer came out and said he was confident a deal would be reached by christmas. the market goes up. that's the deals we're looking for. bottom line is this -- the market believes something is going to happen because it's been holding up extremely well. remember all those concerns

about higher taxes on dividend? the dow utilities bottomed several weeks ago. okay, it is not a gigantic move but the slope has been upward. utilities are among market leaders today. all right, fractional but it is a fairly broad advance. what about those concerns about the mortgage interest desucduct? nice little advance in some of the home builders. pending home sales above expectations. the market believes some kind of deal is coming and that it is going to be substantive. if it doesn't happen, then we're all going to pay the price in the next month or so. >> a lot of prices to be paid. as the market is clearly blowing in the breeze with every single comment from both sides of the political aisle, we wonder whether or not these comments are anything more than just hot air. eamon javers, what say you? >> well, there's a lot of hot air up here on capitol hill, mandy. i just had the chance -- not that he was talking about hot air, but i just spoke briefly with former republican vice presidential candidate paul ryan

who came by here in the hallway. i asked him -- he was in that meeting with tim geithner a little while ago. i asked him what geithner specifically had put on the table, if anything. ryan declining to comment here. he said, i'm trying to keep a low profile these days. i'm not going to come on cnbc and tell but it. he did say he thinks speaker boehner's press conference a little while after the geithner meeting really speaks for itself. let's take a listen to what boehner had to say. this is a little bit of what spooked the markets earlier today. >> despite the claims that the president supports a balanced approach, the democrats have yet to get serious about real spending cuts. and secondly, no substantive progress has been made in the talks between the white house and the house over the last two weeks. >> so who is it, who's not being serious here? no surprise, the democrats think it is the republicans who aren't being serious up on capitol hill. take a listen to harry reid a little while ago as well.

>> republicans know where we stand. we've said it, we've said it, we've said it so many times. president has said the same thing. it's been weeks -- at least two weeks since we met at the white house. we're still waiting for a serious offer from the republicans. >> i folk harry reid here in the hallway up on capitol hill. i asked him what the offer was, if any, from treasury secretary geithner to republicans today in this series of meetings he's been having on capitol hill. reid told me that there was no offer, none from geithner specifically to republicans. what reid said to me was, look, the president of the united states made the democrats an offer and that was two weeks ago. that seems to be what's unfolding here on capitol hill. republicans frustrated they're not getting a specific offer on spending cuts from the democrats. >> eamon, you're up there all the time. right? give us a sense of hope. is there a sense behind the scenes, both parties know what they have to do, are probably willing to get it done, but don't want to be the party that

goes in front of the camera and says we're cutting grandma's medicare by 5%. >> that's exactly it. i think there is a lot of hope here for a deal. i think we'll go right up to the screaming edge of this thing. i think we won't see this deal happen before or well in advance of this deadline because republicans and democrats are far apart on this and they're both going to need to show their political bases that they did everything they could to avoid compromising, avoid caving in before they ultimately cave in. i think there is some caving in coming here. you get little glimmers there's some horse trading going on, for example outside harry reid's office just outside the hall of here, we saw the white house legislator lie ye liaison walki mcconnell's office to reid's office carrying papers. presumably the white house liaison is here working on things behind the scenes. we see him should having back and forth between the offices. something's going on. we'll likely get a deal just before or after going over the cliff but between now and then we'll have a lot of political

rhetoric and the market should just bear that in mind and not overreact to everyone of these statements. >> we had the greenspan briefcase, now we have the eamon javers binder. >> and is that binder full a lot of women? >> no, no. >> thanks, eamon. stocks are supposed to be about earnings. but right now it is clear that pennsylvania avenue matters more than wall street. markets being held hostage by every political comment as that cool graphic we showed you at the top indicated. what do we really need to hear. joining us, managing ekt dor from ed bush securities. art hogan, managing director at lassard capital markets. >> part of the problem is there really isn't a whole lot of other news. europe kind of quieted down. greece deal looks like it is moving forward. there hasn't been a lot of sparks there. earnings season is basically over. we get the normal dribbling of

economic data. but this has kind of been the only thing on the news front so the market's myopically focused on this. it is the biggest news item out there right now and not getting crowded off newspaper by anything else. >> it is certainly very frustrating that all this politics is taking precedence over fundamentals in the market. how strong are those fundamentals and how do you put aside that political noise? >> i think it is a great point. i would actually disagree. i think we've actually seen a lot of good news that's being ignored because we can't get beyond the frustration of the overhang of the fiscal cliff. i think if you look at the economic data that's been coming out of china over the last several days starting this weekend with the pmi data, we're seeing a soft landing and slow recovery there. economic data here in the united states has certainly been good except for those pieces of data except for those relating to hurricane sandy. but other than that, better than expected consumer spending and consumer confidence. it's been ignored because we

need to get beyond this fiscal cliff. it is extremely frustrating for investors to watch but it is why we've seen one of the slowest novembers in years. >> a number of companies these days offering special dividends, it is really starting to pile up. walmart, costco, wynn, all changing their payouts ahead of the fiscal cliff. steve, is there any danger that once the goodie bag has been given out that the investor will make like a tree and disappear out of the stock? >> well, i mean there's an old saying on wall street -- buy the mystery and sell the history. i think these lists of potential special dividend stocks have been around for a few weeks now. i think a lot of the stocks have already discounted the potential for the special dividend. i think the trade's kind of over. it was a good trade maybe two or three weeks ago but many of these stocks have already moved up in value. yeah, there might be a surprise or two here that people haven't figured out yet, but to me it is kind of yesterday's news. >> steve, when and if the fiscal cliff is resolved, what does the

dow do? >> well, i think the dow does go higher. i think art does bring up a good point. a lot of the recent economic data has been good. it hasn't all been -- i don't know if you can believe the stuff that comes out of china, but certainly you can believe the stuff in the united states and it's been all right. not great. >> let me jump in, steve, and ask it a different way then. how about this -- based on earnings and valuations, where is the dow's fair value right now? where should it be? >> boy, you know, i think the dow's fair value is probably somewhat higher. i'm not going to base it on earnings as much as i am going to base it on historically low interest rates. i mean the interest rates that we have out there now act as a tremendous flotation device for equity valuations. so i think the market will drift higher and i think that fair value is being driven by a risk-free rate that's essentially 0.01%, rather than by the earnings power. by the way, corporate america's

demonstrated good earnings up until the last earnings season where it started to weaken. but the five prior earnings seasons have been very, very good. so certainly driving part of the valuation process there. >> art, where do you think fair value for the dow should be? >> i think if we sort of look beyond the fiscal cliff we get beyond this, we've got some results. not just a short-term fix but the actual grand bargain that comes with trying to figure out how we'll work on our long-term issues of debt. i think the dow could pop 1,000 points. i think we need to go from something like a 12 multiple where we're trading now to something like a 15 multiple which i would make a whole lot more sense on forward earning estimates. we're nowhere close to that. i think the market is a bit of a coiled spring here but we have a couple major issues to deal with. one is the short term and one is the medium term. we may not get that medium term issue settled out noo until a couple of months into '13. we have a bumpy road in front of us but i certainly think there's some markets to be had and we should keep a close eye on that and get our shopping list ready. >> art, back to the point about

special dividend and the reason so many companies are giving them out at the moment, warren buffett was on cnbc earlier this week and he said you really should not be investing in companies based on tax breaks. do you agree with that? >> i agree 100%. you certainly shouldn't play a stock because you think they may pay a special dividend or that they may increase a dividend. s&p 500's got a pile of cash. corporate america has $2 trillion in cash on the balance sheets. they're going it either pay dividends or buy back their shares or do some type of acquisitions over the next period of time. investing for that is probably a bad idea. but if you own a company which you like a lot, you like the fundamentals, you think they are a market leader in their industry, then regardless of whether you pay 35% or 40%, you don't make an investment decision based on that in terms of taxes. yeah, there is a lot of nose of what's going on in dividends right now. it makes a lot of sense to get that done in 2012 versus 2013 but you shouldn't base an investment decision on it. >> art and steve, gentlemen, both, thank you very much. have a great weekend, guys.

>> have a great weekend? it's thursday! >> but they're not going to be back on tomorrow. >> well that's very true. they could be on monday and still wish them a happy weekend. >> happy friday. is that better? minus one. on deck, the clock is ticking and the pressure is mounting. what the millionaires are doing that you may want to do, too. and what a rip. huge misses for some of the retailers. guess what? they're blaming sandy for that meps mess. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit,

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happy friday, everybody. tgif. well, all the fear, the loathing around the fiscal cliff has a lot of the big money making moves now. we're going to find out if you should be following their lead in a minute. but first, our wealth reporter robert frank is showing us what the millionaires are doing. robert frank? >> one of the advantages of being wealthy is that you can manage your income around taxes. the wealthy are doing a lot of income managing right now with tax rates scheduled to go up next year for capital gains, dividends, salaries, they are racing to take these gains before december 31st. let's start with companies. much of the rich are entrepreneurs. if they plan to sell their businesses, many are doing it now and trying to close before year end. case in point -- george lucas who sold his company to disney -- saving more than $200

million in capital gains. a broker in miami told me the sale of a $38 million home in miami was driven in part by taxes and the seller's desire to close before year end. wealth advisors tell me the rich are also churning stocks. if they have a large gain, they're taking that gain now. we see that selling pressure in the market something we've been talking about on cnbc a lot lately. some of the biggest money coming from dividends, both public and private companies. tax dividends of course could nearly triple over the next year. more than 100 companies have declared dividends this quarter. that's more than three times the normal amount. the savings for company insiders can be huge. sheldon adelson is getting $1.2 million from that special s dividend. he pays $180 million this year. potentially next year he could pay $520 million. the walton family save a little less. potentially $180 million with

that accelerated walmart dividend. now this isn't to say that the tax hikes will happen or that the rich know something we don't. but with that kind of savings, it's not worth taking the risk. guys? >> robert frank, thank you very much. that's not a bad chunk of change they're saving. well, men may be from mars but are they smarter investors? fidelity investments out with their latest study and how the genders are differing in protecting their portfolios. joining us today, alexandra tou skch sik. i want to ask you about the fiscal cliff and what fidelity is advising its clients to do ahead of it? >> terrific. okay. so i'm actually not going to talk about the fiscal cliff. i'm really here to talk about why men and women are investing differently, if that's all right. >> okay. so how are they investing differently, alexandra?

>> our study is incredibly interesting. it is looking at millionaire men versus millionaire women. so what we found is women are investing more conservativively. so where they put their money for the past 12 months is cds and cash equivalents, individual bonds, and third is individual stocks. men are looking -- so twice as likely to want to get the best return. women are twice as likely to want to have a holistic financial plan. >> what i find really ironic in some of your findings here is that even though, as you just said, women often get the better return -- the men still feel wealthier. why is that? >> exactly. so men -- i mean the interesting thing is we looked at millionaires and men and women who had exactly the same amount of money, 80% of the men felt wealthy, 60% of the women. so i think what we're really finding here is that there's a huge emotional component to money. so women feel less ready for

retirement. they feel less wealthy. they're more concerned about the impact of changing taxes. so it is just a very emotional thing. i think the important thing is to keep that in mind as you work with investors, both male and female. >> certainly a very valuable thing for financial planners and advisors to know. alexandra, thank you very much for bringing those findings to us. still ahead -- income inequality? how about trading inequality? how come so many ceos make the right moves at the right time? >> yeah. then later on in the show, america on track to be the world's biggest oil and nat gas producer. it is a really bold headline, it is a big statement. we have the exclusive with the man who crunched the numbers. here's today's "return on retirement." the 100 largest public pension plans have a little more than $2.5 trillion in assets.

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today's "return on retirement" -- how much do the 100 largest public pension plans need to meet accrued liabilities? the answer -- just over $1 trillion. that's a funded ratio of under 68%. according to the milliman public pension funding study. it was the big headline just a few weeks ago -- america on track to become the world's top energy super power and it could happen in just seven years.

sharon eper southern has the exclusive interview with the economist that came up with one of the boldest forecasts yet. >> that's right, mandy. i'm here at the council on foreign relations with the chief economist from the international energy agency who came up with this very, very optimistic forecast that we will see the u.s. as the world's largest oil producer by 2017. passing russia, surpassing saudi arabia. some critics have said that might be a bit too optimistic. what do you think? how did you reach that conclusion? >> i think this is very, very modest growth we expect in fact from natural states. mainly driven by tight oil, shale oil. if you look at the next years, we expect u.s. shale oil to grow 3 billion barrels per day and this will make u.s. the leader of global oil production overtaking saudi arabia and russia. and at the same time, the natural gas production is also going to increase significantly

and as a result of that, we expect u.s. will be the top natural gas producer of the world, around 2015, overtaking russia. >> one of the things that's so key here, you mention unconventionals and the big boom that we're seeing here. but something else that you had in your report that hadn't been mentioned as much is the fuel efficiency that you see helping as well. how much does that contribute to what your forecasts are? >> exactly. when we say that u.s. is making giant steps towards self-sufficiency or energy independence, there are two legs of that. the first leg is increase in the oil production, and the second one is decrease in the oil consumption at home. mainly as a result of the efficiency standards, cafe standards. when we look at the future, we think about 50% of the success story is because of the oil production and 50% is decline in the oil consumption as a result of the cafe standards. >> we were talking about this

quite a bit when this study first came out. every headline you saw talked about the u.s. being on top, and on top of russia and saudi arabia. but how much of this also has to do with the decline in production that you may be forecasting for those two countries, and what does that mean for the overall dploeull g supply picture and what does it mean for prices? >> saudi arabia, we still increase production. and saudi arabia we still remain the largest oil exporter of the world. u.s. will be the top producer, but u.s. will use a lot of oil at home and saudi arabia will produce less than united states but we will be the largest exporter. in terms of russia, the shale production increases in terms of natural gas but u.s. increase is much more than russia. so when we look at the global picture we see u.s. will be number one, followed by russia and saudi arabia. >> all right. well there you have it, bold forecast and rationale behind it. back to you. >> thank you for that, sharon

epperson. coming up next, it must be opposite day because there is actually some good news for rim. later on the short list to buy hostess. the story like the twinkie -- hard to kill. back with it after the break. ♪ ♪ ♪ [ male announcer ] 'tis the season to discover the kid in all of us. the memories that last, start with the gifts that last. ♪ enjoy free shipping and great values on your holiday shopping from l.l.bean.

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it is street talk time. we're going to break down some of the names on the move right now. first, research in motion. it is soaring today. a goldman sachs upgrade to a buy, no less! >> what a month rim has had. as reuters notes, goldman jumping on the blackberry 10 bandwagon. the latest analyst to hop on. there's been more positive feedback about the blackberry 10 all ahead of its january 30th launch. goldman sees a 30% chance of success for bb10. but that's also 70% chance of >> it sounds so much better when you leave out that 70%. 30%! next up, nike with another analyst boost for this stock as well. >> hsbc raising nike to overweight from neutral. they say the underperformance of nike shares the last year probably justified, but they

like the portfolio focus, they like the inventory clearing. what they call "phenomenal cash flow generation." also hsbc raising the nike price target to $112 from $101. next up we have investors hoping advance auto parts will get a pop by selling itself. but -- not so much. >> the stock is down 6%. here's why. reuters reporting an auction for the roanoke, virginia based company failed to attract bids that met its price expectations. it makes it unlikely the retailer will proceed with plans to sell itself. advance auto ran a limited auction that attracted interest from biofirms like carlisle group, kkr and a couple others. still, even with the deal looking less likely, stocks actually up 12% over the past year. >> i'd take 12% over nothing. next up, guess. no, guess. it's guess. bit of an analyst fight here on the back of earnings. >> we'll guess which analyst is going to be right because piper jaffray upgrading this to

overweight. but karas downgraded the stock to average from above average. guess third quarter earnings fell 45%. currency impact hitting the name. but this is another one of those special dividend companies. $1.20 a share launched by guess. stock up 2% right now. >> i think what's really interesting about guess today, it is actually the exception today in retail because many of the big names -- macy's, target, kohl's, they're all getting whacked after missing their monthly sales numbers. the question is, though, is it all sandy related? let's bring in herb greenberg and jan nippon. jan, it is so easy to blame the weather but in this case, is it justified? >> well, the weather was a problem and the long calendar is a problem. i think the weather was less of a story than the long calendar. when you put two extra selling days in front of christmas in december, it has to come out of somewhere. it will come out of early december, but if only one-third of it even comes out of november, it's about a 400 basis

point hit to sales. so i think most of what we're seeing here is early november had two warm of weather in one-third of the country, a great hurricane in one-quarter of the country and the consumer said i got plenty of time, i don't have to really go out and spend so we had a really slow front end of the month. we'll get a lot of that back in december. i'm still predicting a great christmas. >> we have two themes on this show -- panic now or everything's fine. which one is it for retail? >> everything's fine. >> it's a "rise above" pin. >> do these drops in the share prices present a buying opportunity and which ones? >> salutesly. macy's should be a buy. american eagle is a buy. we need to get out and look at these stocks very carefully because when they drop here, they've dropped for all the wrong reasons. some people have got real problems. most people just have a long calendar. >> jan, we're talking about sales here, but then we're also talking about a very heavily

promoted sales season. how will margins look? how will profits look this christmas season? >> margins in november were good. slow sales, good margins. that's what you want in the business if you have slow sales. right? in december where margins are going to be fine. there's no inventory problems. i was at king of prussia yesterday. i looked at every store in the mall. i looked at the boxes, i looked at kohl's, i looked at target. >> why do stores right now -- this is interesting. if you're out there even during the week, you'll see very busy stores. it's almost like what's happened? what are we seeing? >> the customers really, really interested. we've had great sales for the last two weeks. >> here's the bottom line, herb. as you should know. anybody who's bet against the american consumer's desire to spend money has littered the path of sadness throughout economic history. >> i agree but the consumer --

>> never bet against americans' desire and interestingness to spend, whether cash, credit, lay away, your uncle's donkey, whatever it might be. >> but increasingly they want a sale, a good deal. amazon's kufti ingcutting price. >> they might want to buy but at what price point is the question. >> right. that has to be a factor here going forward especially this holiday season. >> herb, we're seeing better online sales from my guys that we are from amazon. >> if you're saying that, ultimately that has to hit the bottom line in a different way. again, we could have sales that are really going gangbusters but you're not going to see it on the bottom line. >> i don't believe that. i think we're seeing very good input prices which are driving gross margin, allowing people to lower the top line price and still make better gross margin than they did last year on the same product. >> talking of prices, everyone wants every day low prices. or do they? i actually heard little whiter that you have gone positive on jcp. >> i have. the stock has fallen so far that

i believe if they go positive on store for store sales in q3 and q4 next year everybody will come piling on to the stock. i think they will go positive next year -- >> oh, my god! are you so stealing my thunder for one of the predictions i was going to do for cnbc.com where i was going to say same-store sales for jcpenney next year will go positive. of course they can't help but go positive. >> have you thought about where you're taking me to dinner on your bet when you're going to lose by $20 a share on jcp? >> popeye's. but as i pointed out yesterday, we talked about cramer's interview with pvh where the ceo was saying that because of the izod sales at jcpenney, he was actually seeing a bump up. he was actually being complimentary to what he sass seeing inside of jcpenney. what do you think about that? >> pvh is having a great run. the izod is actually doing well at penney. they need a bunch more shops. next year at this time they'll have 30 additional shops. if they do, and the customer

comes back -- and. they run some promotions like they did for black friday -- they can bring in the customer. they're not going broke despite what other people say. so at these prices, the bonds and the stock are very interesting. >> jan, who are the single or one or two best run retailers in america right now? who's doing it right? jcp? >> macy is doing as right as anybody's ever done it and walmart is doing it as right as anybody's ever done it. >> walmart of the walkouts with the employees? >> whoa, whoa. >> they are running their business with better in stocks, better pricing. they're driving the business based on price. they're doing what walmart did for the last 40 years to make it work. >> wait a minute. if you're right on jcp, doesn't that come out of macy's hide? >> it does in a couple of years. i'm worry about it in a couple years. but right now macy's is running as well as they can run. >> is there a common theme in terms of the retailers that are getting it right, herb, do you think? or is it still a case by case? >> i think it is a case by case.

look at tiffany especially on the higher end. >> i want to tell you something, jan, before we go, too. i spend three days in philly, charlotte and atlanta. talked to people, ceos, small business people, people at hotels, taxi drivers, whatever. i ask everybody the same questions -- they're all more optimistic than they were this time last year. they all said they're going to spend more, they're all more confident. every single person, man or woman, philly, charlotte, atlanta -- >> you know what in they feel better. >> even with the fiscal cliff? >> they assume they'll get something done. >> i don't mean to be the party spoiler here. >> that's your role. >> we also see a rise in subprime credit. we also have to look at is this going to be cash we're spending or will we see a sharp increase -- >> that was my point. my uncle runs a big used car dealership. people spend money no matter what it takes. right? people will buy a used car on four credit cards. >> i think it is a lot of frugal fatigue out there as well. people are just sick of sifting

on their wallets. they want to get out there and spend. jan, thank you for joining in. it's like a monkey cage sometimes over here. now to jackie deangelis with a "market flash." >> keeping an eye on fluor. the new payment date is december 26th of this year versus january 3rd of next year. probably not a coincidence that they want to pay the dividends before the end of the year. this just another company change the date -- payment date or issuing a special dividend. ahead of that fiscal cliff deadline, the stock up .4%. >> definitely not a coincidence is what i would say. right? >> it's going to be a wonder. we almost need to have a pool. i think bob pisani said there was 173 companies or 175 companies so far that have done a special dividend or moved their dividend up. we should have one of those carnival things where you count the jelly beans, where our writers view in and guess. we're going to announce a contest right now.

tweet in mandycnbc, sullycnbc. how many companies by december 31st at midnight will have announced a special dividend or moved an expected dividend payment up. closest guess gets a used hat from me and -- >> how about a cnbc t-shirt and a mug, unused mug. brand-new out of the package mug. bob pisani was -- >> we'll figure something cool out. >> lots of lists going around the traders' desks at the moment with lists of potential candidates for special dividends. >> we're at 175 or so now. write us your guesses. we'll do something pretty cool. >> trust us. trust us, we're professionals. >> speak for yourself. coming up, are social stocks dead? break out your tanning oil because we found a sunshine stock that's really been burning it up. ] introducing the new dell xps 12. part of a whole new line of tablets from dell. it's changing the conversation.

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going to tell us which spending cuts he would be willing to make to reach a fiscal cliff deal. plus, we will hear exclusively from the ceo of oil giant chevron. he's warning that a fall off the cliff would force his company to drastically change its investment strategy. and is it possible the dollar bill, the paper dollar bill, could actually be replaced by a dollar coin? all in the name of fixing the debt? we have both sides of that coming up. maria and i both look forward to seeing you at the top of the hour from here at the new york stock exchange for the last hour of the trading day. see you then. >> thank you very much, bill. it is "sunshine stock" time. shares of ebay hitting an eight-year high today. that stock has not traded at these levels since january 2005. ebay has gained more than 6.5% just over the past week alone. do you know someone who needs some sunshine? how about social stocks? they're not it because they've been in a slump. does wall street continue to be anti-social?

julia boorstin, what do you think? are they over? >> well, brian, i'll put it this way. these daily deals companies are dealing with some dramatically slowing growth. so now they're trying to figure out what their future looks like, and that means looking to some entirely new businesses. today groupon announced it's becoming major league baseball's official daily deals site. this as groupon looks to sell more exclusive experiences and rely less on those lower margin commodity style deals. now this comes as groupon's board heads into a board meeting today. it's certainly going to be debating what direction to take the company. just yesterday andrew mason said that with the stock down 80% since the ipo, he'd be surprised if the board was not considering replacing him so he's sure to spend some time in the board meeting today defending his leadership in the face of several key concerns, including the company's accounting issues, executive departures, fitting margins and struggles in europe. now living social, which announced layoffs today, about

400 employees, that's 10% of ifts global workforce, blamed those layoffs on the fact that it grew its employee base by more than ten times in less than two years saying it is freeing up resources for critical investments in marketing, mobile and other areas. this comes after amazon blamed its investment inn in livingsocial for a loss of $169 million in the third quarter. we'll have to see what happens with groupon after its board meeting today. the board's two most powerful members, as well as the groupon company itself, are not commenting on reports andrew mason is heading for the door. as long as those two board members will back him, mason will stay. >> he said if the board wants him to leave, he will leave. we'll have to wait and see. thank you for the latest on that. jackie deangelis has another "market flash." could it be possibly nor special dividend giver? >> no, not this time. we're watching whiting

petroleum. briefly halted a few moments ago due to an individual security volatility trading pause. translation -- that kind of pause is usually triggered when a listing experiences a price change of 10% or more within a rolling five-minute period of time. as you see from the chart, we did see a drastic dip though we don't have any real news on why and the stock opened lower when it resumed trading. right now 41.64%. down 1.5%. still ahead here on our show -- corner office trades. battle over what some ceos are getting away. and it is all perfectly legal. and, the markets. let's take a look at where they are right now. we've seen kind of a wild day based on comments of boehner, schumer, reid. right now the dow jones industrial average is up just a blew eluga whisker under 50 poi. mostly green. back after this. [ male announcer ] at scottrade,

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[ male announcer ] welcome to the world leader in. derivatives. welcome to superderivatives. corporate executives are naturally barred from illegal insider trading, but is an sec rule designed to avoid those kinds of accusations actually giving insiders a leg up?

an article in "the wall street journal" explored just that. some insiders who trade legally are beating the market, as you might expect. one reporter wrote a follow-up to that story in "the wall street journal." he joins us from new york. also, our own herb greenberg and john carney, who has a very different take on this. first, i want to ask you, justin, what's going on here? i guarantee when people hear ceo anded inner trading in the same sentence, they're ticked off. >> yeah, i mean, what we've seen is that these guys, they're incredibly lucky, especially once you strip out the routine guys like bill gates who are trading an obscene amount of stock every quarter like clockwork. all of the sudden you see that insider trading are getting very good returns. >> they might be getting very good returns. is it legal or illegal, though, john carney? >> there's a very easy way that

the kind of returns "the wall street journal" showed can be accomplished legally. just regularly schedule trades and cancel them whenever there's not bad news coming out of your company. that way, you're never selling after the bad news, and you avoid the losses that comes with selling after bad news. we don't know because i haven't seen all the data that "the wall street journal" used, but i suspect that explains a lot of the abnormal returns they were able to report. >> john, i know one of your theories on this whole thing is there's no law against stopping trading, not trading. i get it. but i have to tell you something. that makes a mockery out of what should be a regular trading plan. >> well, herb, let me put it a different way. isn't it good that when there's bad news coming out about a company that the insiders are actually holding on to their stock? they're not selling out. they're actually holding their stock and waiting for better times. >> actually, if they've been on a routine plan, month in, month out they're trading, then i would say they should continue

trading. i would argue that if they suddenly put in a trading plan like this, at that point, then they've got a problem. >> the big difference here is that the term insider trading and all the rules built around it including the original legislation passed in the 1930s requires one thing for something to be insider trading. that's a trade. if you're not trading and deciding to the no, you're ndece ing not to, you're not going to get in trouble. your shareholders are advised to keep holding the stock. they're staying in the trade for longer. >> justin, a bit of a spat developing here. come in and adjudicate. >> let's break this down. first thing, most insider trades are sales just because you got a big chunk of stock and you're selling it through your career.

so, you know, i guess it would be one thing if people were hanging on during the bad news, but what they're doing is cancelling a sale ahead of the bad news, right? you have the sale happen if there is good news. that's not so great, right? you mention you'd love to see all the data on the number of sales that are canceled. well, so would we. that doesn't have to be filed with anyone. that doesn't even have to be filed with the sec, the existence of these plans. >> justin, there's two things here. when i look at an insider sale, planned or not, that's one thing. people sell for a lot of reasons. kids going to college, got a trust, change in capital, whatever it is. a buy is a very different thing, right? can we look at this in the same light? >> yeah, i mean, you know, folks have looked at sort of both the buying and selling and whether people are doing the scheduled buys and sales. some economists have done some really nice work on this.

what they did is they stripped out all the routine guy, the guys selling on a schedule like bill gates or buying on a schedule like someone who gets an options grant every year. you strip those out, and you get returns of about 10% better than the market. it really does suggest there's a lot of luck going on here. >> i do think in some of those trades it's more than luck. when you're buying or selling around good or bad news, there probably are people who are doing that and violating the rules. the big thing is with these trading plans, when people aren't trading, i don't think we want the law to reach into people who decline from trading when they hear bad news about a company. really, that's all of us. that's every single journalist who works at cnbc. we don't buy stock when we have bad news. >> for the people listening at home, they're thinking, if we work on the premise that it's legal, right, but it does seem a little unfair, level the playing field. herb, how do you know how who t follow? which insiders do you follow? how do you know when it's the

right time? >> that's perhaps the best question. the insider trading experts are looking for that. the people who actually follow sales, they're looking for what are considered good and bad sellers. the average guy can't do that because you have to be able to see the pattern of that person's sales and purchases over -- >> there's firms that do this. >> you've got an insider score. >> no one is going to sit at home at night except for you and go through it. >> i'm not even going to do that. >> there's been academics who have looked into whether or not you can beat the market by trying to tracked inner sales or purchases. it's really hard to do, in part because of the very thing we were just talking about. >> it's a voluntary thing, not something automatic. >> and they should sell. if you're a corporate insider and you're getting a lot of stock as part of your compensati compensation, it's only rational for you to regularly sell down that stock because you have an overexposed portfolio to your very employer. you want to diversify like every other investor in the world and

sell some of it. but the law does allow this loophole where when you get that information, you decide not to sell before that information comes out. >> justin, thank you so much for opening up this big can of worms. thank you very much to justin, herb, and john for playing. coming up next, the video of the day. maybe the video of the year. the world's strongest ear.

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